I recall looking at the NDP platform from the last election campaign where they had tens of billions of dollars in increased spending and various ways of funding it. I don't know if it was completely funded, but I remember a 30% corporate tax rate—30% above where it is right now.

And actually to that point, if I could, I'll go with that. I remember we had the conversations in 2008, 2009, and 2010, as we considered our options. Every single step of the way the NDP members were calling for vastly increased spending, a vastly higher deficit, actually in partnership with the Liberals at the time. We could not possibly spend enough to satisfy them.

Maybe I'll start with the point that if we were to have gone down the road the NDP suggested in the last election campaign, with tens of billions of dollars more in spending and a corporate tax rate that would be 30% higher than it is today, what impact would that have had, in your view, on this very strong global reputation Canada has for balancing our budget and being a place to invest?

Well, look, as a government, we can't take seriously those who argue that we should have Keynesian economics when times are good, Keynesian economics when times are bad, Keynesian economics when times are okay, that at all times we should just spend more and more, that “To heck with the kids. To heck with the deficit. To heck with the debt. Don't worry about it.”

We actually have to arrive back at a balanced budget. The deficits that we ran were deliberate deficits that were agreed to by G-20 economies as a result of the collapse of the American economy and the global consequences that came from that.

These were agreed-to deficits on a specific timeline when there was agreed-to stimulus spending going into the Canadian economy. Even with very low interests rates, people were not borrowing money and were not investing in the economy because we had the worst recession since the Second World War.

These were deliberate deficits, and we've had to take serious, concrete action to reign them back in and to eliminate them. We've gone from a mere $55 billion annual deficit to having a surplus. We've done that in just a couple of years time. We've done that through fiscal restraint, fiscal responsibility, and also by growing the Canadian economy.

We have to have that kind of flexibility with balanced budgets and surpluses on the horizon so that we can do things and react responsibly to challenges in the Canadian economy.

The auto sector is the perfect example. We do want to pursue OEM investments in Canada, but we also have to a flexible approach with regard to our policy. We have the fiscal room to either lower taxes or, as has been talked about here, to draw the private sector R and D into the automotive supply chain through partnerships so we can continue to grow. But you can't do that if you are just shovelling more money out the door without any kind of restraint; it requires the fiscal room.

That's interesting. You quoted Hillary Clinton, and in that same conversation, one of the things she mentioned, in addition to the strength of the Canadian middle class, was that we also have a stronger safety net in this country.

It seems to me that the stronger safety net is made even more secure by the fact that we have a balanced budget. Unlike other countries, we're not going to have to make the difficult decisions they're going to have to make years down the road, because they continue to spend in unaffordable ways.

Could you speak to the effects of a balanced budget as you sit at the cabinet table and take a look at making decisions for our future?

Canadians believe in the ethic of common provision and ensuring that those who need help get help. Of course, our health care system is a central Canadian pillar of that, right? We balanced the budget while increasing health care spending 6% every single year. We've maintained the commitment to Canadians not to balance the budget while cutting health care.

Other governments didn't make those choices; we made that choice. That was a commitment that I think is core to our sense of compassion for one another. But better than that, we also helped seniors on fixed incomes by increasing the personal deduction. Taking tens of thousands of low-income Canadians and seniors on fixed incomes off the tax rolls altogether, pension income splitting for seniors, these are things that we've done. Overwhelmingly, the tax benefits and tax relief that we've put in place in Canada have benefited those who needed it the most. Those measures are why I think we are arriving at a time of general economic prosperity—yes, with its challenges.

We've arrived at a balanced budget. We alone in the G-20 have balanced our budget while cutting taxes—

—like our health care system, by protecting those key investments. That's what we committed to doing: being a steady, stable, majority government that would balance the budget without cutting health care spending—